Key Points
- The central financial institution expects progress close to 6% in 2025, cooling to 4.2% in 2026, with inflation across the mid-3% vary.
- Officials say the engine is shifting from harvest-led swings to funding, business, and providers.
- Investment-grade standing and new tasks assist the case, however the increase should present up in paychecks.
Paraguay’s newest headline is straightforward: a powerful 2025, then a slower 2026. Central financial institution president Carlos Carvallo says GDP ought to rise about 6% this 12 months and 4.2% subsequent 12 months. He forecasts inflation of three.6% in 2025 and three.5% in 2026. That issues for planning.
The story behind the numbers is extra uncommon. Paraguay is usually summarized overseas as soy, beef, and hydropower. It is usually described because the world’s sixth-largest soy producer and a significant beef exporter. Those sectors nonetheless matter.
But Carvallo argues progress is broadening. He factors to business and providers, and to a requirement image led by funding reasonably than a consumption increase. He says the first, secondary, and tertiary sectors all expanded above 5%.
Inflation is the credibility check. Paraguay grew 4.7% in 2024 and ended that 12 months with 3.8% inflation. Carvallo acknowledges meals pressures, particularly larger beef costs, however calls them non permanent and says they didn’t change the broader index.
The IMF has additionally mentioned expectations stay anchored near the central financial institution’s 3.5% goal. There are examples of the “new base.” The maquila export-manufacturing program reported file exercise in 2025, citing export progress and job creation.
JBS introduced a $70 million poultry funding plan, with a aim of roughly 1,100 jobs at full capability. This doesn’t erase commodity threat, but it surely diversifies it. Why ought to outsiders care?
Paraguay feeds world meals chains, exports energy, and is attempting to maneuver up the worth ladder with out shedding macro self-discipline. Moody’s improve to funding grade (Baa3) in July 2024 strengthened that narrative.
It may decrease borrowing prices over time. The more durable query is whether or not a cooling 2026 turns the controversy from forecasts to residing requirements—and whether or not the mannequin holds when the cycle turns.
